The Tooth Fairy gives my kid’s friends $20 per tooth! Am I a cheapskate if I give less than $5?

My daughter recently lost her first tooth. After much thought, I gave her a $5 bill from the Tooth Fairy and a cuddly toy. She also left a note to congratulate my daughter, but also said that future gifts would be less than $5 as this was a first tooth and, as such, was a very special occasion. Other children at my daughter’s school receive $20 from the Tooth Fairy when they lose a tooth. What do you recommend? I feel like other kids put the Tooth Fairy under pressure to stump up more cash.

Claire in New York

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Dear Claire,

What began as a nice gesture, has turned into another way for some parents to spoil their children. The Tooth Fairy is coming under pressure from other parents (and the stories their children tell each other at school) to start doling out more money. She risks losing her sparkle. The modern incarnation — celebrated by Esther Watkins Arnold in a play “The Tooth Fairy” in 1927 — has lived through the Jazz Age, two World Wars, the Great Depression, the Swinging Sixties and, now, must do battle with the Age of Entitlement when $5, in some social circles, may soon not be enough.

The Tooth Fairy has lived through the Jazz Age, two World Wars, the Great Depression, the Swinging Sixties and, now, must do battle with the Age of Entitlement.

Back in the 1880s when I walked the cobbled streets of Dublin with my wooden spinning top wearing torn dungarees made out of a potato sack and singing the “Who will buy my sweet red roses?” from “Oliver!” — I’m exaggerating here slightly — the Tooth Fairy gave me a 50-pence piece wrapped in tinfoil under my pillow. That was a generous sum of money for me back then and, more importantly, the seven-sided 50-pence piece was a thing of beauty with an Irish harp on one side and a bird in flight on the other.

Abraham Lincoln is a revered president and his chiseled face is used to great effect on the $5 bill, but I find it hard to believe that even the Tooth Fairy could fashion a rumpled-up note into a shiny reward under your pillow. Doesn’t she have a stash of presidential gold $1 coins tucked under her wings? The 2015 collection from the U.S. Mint features Harry S. Truman, Dwight D. Eisenhower, John F. Kennedy and Lyndon B. Johnson. It may not suit all political tastes, but each one surely provides a teachable moment.

I can understand that you felt pressure to give $5 and a toy, and the Tooth Fairy was right to alert your daughter to deflation after the first tooth, I don’t advocate tying allowance to chores around the house as children should expect to give their parents a helping hand, but losing a baby tooth — particularly a first tooth — is a milestone in your child’s life and some kind of token gift is a special way for her to remember it. Throw in a colorful toothbrush too or even a book. Lessons in good hygiene and some reading doesn’t hurt, either.

In 2015, the average amount given for the first tooth was $3.91, a 10% decrease from the year before, according to a survey released last March by Delta Dental Plans Association, a not-for-profit network of independent dental service corporations in Oak Brook, Ill. Kids in the Midwest got half that amount ($3.11), while kids in the Northeast got the most ($5.27). “The Tooth Fairy can deliver a powerful lesson about finances from an early age and be a great way to make losing teeth less scary for kids,” Jennifer Elliott, vice president of marketing for Delta Dental Plans Association, said.

The Tooth Fairy has enough to remember — she gave out around $256 million for lost teeth last year, according to Delta Dental — so pick a figure (I suggest the aforementioned coins) and stick to it. Otherwise, you risk haggling with your child on behalf of the Tooth Fairy. (It never occurred to me that the Tooth Fairy brought anything but that 50 pence in tin foil because that’s what I got and what my siblings got too). No further explanations or excuses are needed. If a school friend gets $20 and your child wonders why? Tell her: “That must have been one painful tooth.”

(This story was updated.)

Do you have questions about inheritance, tipping, weddings, re-gifting, or any tricky money issues relating to family and friends? Send them to MarketWatch’s Moneyologist.

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